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Sunday, 30 December 2012

Fiscal cliff is a
newly coined term in USA, referring to the effect of a number of laws
which, if unchanged, could result in tax increases, spending cuts, and a
corresponding reduction in the budget deficit beginning in 2013. These
laws include tax increases due to the expiration of the so-called Bush
tax cuts and across-the-board spending cuts under the Budget Control Act
of 2011. The year-over-year changes for fiscal years 2012–13 include a
19.63% increase in tax revenue and 0.25% reduction in spending. The US
Congressional Budget Office estimates that allowing certain laws on the
books during 2012 to expire or take effect in 2013 (the baseline
scenario) would cut the 2013 deficit approximately in half and
significantly reduce the trajectory of future deficits and debt
increases for the next decade and beyond. However, the 2013 deficit
reduction would adversely impact the economy in the short-run. On the
other hand, if Congress acts to extend current policies (the alternative
scenario), deficits and debt will rise rapidly over the next decade and
beyond, slowing the economy over the long run and dramatically
increasing interest costs. Many experts have argued that the U.S. should
avoid the fiscal cliff while taking steps to bring the long-term
deficit and debt trajectory under control. For example, economist Paul
Krugman recommended that the US focus on employment in the short-run,
rather than the deficit. Federal Reserve Chair Ben Bernanke emphasized
the importance of balancing long-term deficit reduction with actions
that would not slow the economy in the short-run. Charles Konigsburg,
who directed the bi-partisan Domenici-Rivlin deficit reduction panel,
advocated avoiding the fiscal cliff while taking steps to reduce the
budget deficit over time. He recommended the adoption of ideas from
deficit panels such as Domenici-Rivlin and Bowles-Simpson that
accomplish these two goals.

Cheque Truncation System (CTS)
is a process that will give banks the freedom to avoid transporting a
physical cheque from the presenting bank (where the cheque is deposited)
to the drawee bank (where it is issued). As per the CTS, instead of a
physical cheque, an electronic image of the cheque will be sent to the
drawee bank. Of course, this image will have all the necessary
information needed to process the cheque. Right from the nine-digit MICR
code, the date of the cheque and the details of the presenting bank,
like branch, etc.

The Reserve Bank of India has extended the date for
implementation of Basel III, the global capital norms for banks, by
three months to April 1.

“The Reserve Bank of India
has rescheduled the start date for implementation of Basel III to April
1, 2013 from January 1, 2013,” the central bank said.

The RBI, however, did not provide reasons behind the rescheduling.

The
move, experts said, will provide additional time to some banks that
need to enhance their capital base in line with the new norms for
strengthening the resilience of the global banking system.

The
RBI further said that India will closely monitor the progress on Basel
III implementation in other countries, particularly the major ones, who
are members of the Basel Committee.

The RBI had
issued guidelines on the implementation of Basel III capital regulation
in India in May this year. These guidelines were to be implemented from
January 1, 2013 in a phased manner and were to be fully implemented by
March 2018.

As per the new global norms, banks will have to hold core capital of at least 7 per cent of risk weighted assets by 2018.

In
September, the RBI Governor, D. Subbarao, had said that Indian banks
will require an additional capital of Rs 5 lakh crore to meet the new
global banking norms.

Of the total Rs 5 lakh crore,
equity capital will be Rs 1.75 lakh crore, while Rs 3.25 lakh crore will
have to come as the non-equity portion.

The
government, which owns 70 per cent of the banking system, alone will
have to pump in Rs 90,000 crore equity to retain its shareholding in the
public sector banks at the current level to meet the norms.

The
Basel Committee recently said that the 11 member jurisdictions
including India, Australia, Canada, China and Japan, have published the
final set of Basel III regulations effective from the start date of
January 1, 2013.

Seven other jurisdictions including
the European Union and the US have issued draft regulations, and have
indicated that they are working towards issuing final versions as
quickly as possible.

Tuesday, 18 December 2012

Axis Bank, India’s third largest private sector Bank announced the launch of ‘Axis Bank e- Gift Card’, thereby becoming India’s first bank to offer to all bank’s domestic customers an option to buy an e- Gift Card. The Axis Bank e- Gift Card offers customers an alternate channel through which they can buy a gift card for their dear ones. The facility of e- Gift Card can be availed at www.gogiftacard.com where acustomer can buy and send a card of his choice by either e-mailing it or sending it via SMS to their loved ones. Domestic customers can purchase these online e- Gift Cards using their credit / debit card issued by their respective bank. All purchase transactions shall be limited to sites that support verified by Visa and MasterCard Secure Code for two factor authentication.

Thursday, 13 December 2012

The Reserve Bank of India (RBI) has advised all
Scheduled Commercial Banks (SCBs) on 10.8.2012 to offer a ‘Basic Savings
Bank Deposit Account’ and also convert existing basic banking
‘no-frills’ accounts’ to ‘Basic Savings Bank Deposit Account’. Such
accounts do not have the requirement of any minimum balance and comes
with the facility of ATM Card or ATM-cum-Debit Card. However, the
holders of such accounts are not eligible to open any other savings bank
deposit account in that bank. Under Financial Inclusion, banks have
already opened 3.16 crore accounts by March 31, 2012.

Market regulator SEBI on December 12 said it has appointed a committee under ex-Cabinet secretary K M Chandrashekhar to frame a single set of guidelines for all types of foreign investors.

The committee will suggest ways to simplify the investment process for all overseas entities like foreign institutional investors, foreign venture capital investors (FVCIs), qualified financial/institutional investors (QFIs), and NRIs, among others, and also to strengthen surveillance over them.

Non-banking financial companies (NBFC) would need RBI’s prior approval before making changes in their ownership control, a draft guideline of the central bank said on December 12.

The draft guidelines, based on the Usha Thorat Committee report, also seek to make mandatory for all deposit-taking NBFCs to obtain credit rating.

Appointment of CEOs of NBFCs with asset size of Rs.1,000 crore and above would require the RBI approval, it added.

“In the interest of good governance and the sensitivities associated with NBFCs... such companies, whether listed or not, will need to comply with Clause 49 of SEBI’s listing agreement on corporate governance including induction of independent directors,” the draft said.

The draft norms said existing unrated NBFCs-D will be given one year to get rated, “thereafter, they would not be allowed to accept any fresh deposits or renew existing deposits, till they get themselves rated,” it said.

On change in control or transfer of shareholding, the draft said that all registered NBFCs should take prior approval from the RBI where there is a change in control and increase of shareholding to the extent of 25 per cent by individuals or groups, directly or indirectly.

Regarding non-performing assets (NPAs), the RBI has proposed that asset classification and provisioning norms should be made similar to that of banks for all registered NBFCs irrespective of the size.

At present, the period for classifying loans into NPAs in case of NBFCs is higher at 180/360 days compared to 90 days for banks.

The RBI has sought stakeholder comments on the draft norms by January 10.

The Reserve Bank of India (RBI) on December 12 stipulated that debit cards would be issued to customers having Savings Bank and Current Accounts but not to cash credit or loan account holders.

Banks may issue only online debit cards, including co-branded debit cards where there is an immediate debit to the customers’ account, and where straight through processing is involved, RBI said.

“Banks are, henceforth, not permitted to issue offline-debit cards. Banks which are now issuing offline debit cards may conduct a review of their offline debit card operations and discontinue operations of such cards within a period of six months from the date of this circular,” RBI said in a notification to all banks.

Banks were also asked to ensure that customers were duly informed regarding switching over to online debit cards. However, till such time as offline cards were phased out, the outstanding balances / unspent balances stored on the cards would be subject to computation of reserve requirements.

Banks should undertake review of their operations/issue of debit cards on half-yearly basis. The review would include, inter-alia, card usage analysis, including cards not used for long durations due to their inherent risks.

Monday, 26 November 2012

ATMAn automated teller machine (ATM) is a machine in which a customer can use his card along with PIN to get cash, information and other services.Bank GuaranteeBank guarantee is a promise by a bank on behalf of its customer to a third party to pay an amount specified in the guarantee deed in case the customer fails to perform the obligation as stipulated in the deed.Banking OmbudsmanBanking Ombudsman is an independent dispute resolution authority set up by the Reserve Bank of India to redress customer complaints against deficiency in certain banking services.BillsBills are financial negotiable instruments such as Bills of Exchange or Promissory Notes. Bill of Exchange is issued by a seller to his buyer directing him to make payment for the goods supplied/ services rendered. Bill in the form of a promissory note is issued by a buyer to his seller undertaking to make payment for the goods received/ services rendered.Bill Purchase / DiscountingBill purchase / discounting are modes of extending credit to the seller of goods who has raised demand / usance bill of exchange. Demand bills are purchased and usance bills are discounted.CardCard is a general term for any plastic card, which a customer may use to pay for goods and services or to withdraw cash. In this Code, it includes ATM/ Smart/Debit/Credit cards.Cash Credit/OverdraftCash credit/overdraft is a form of credit facility in which a borrower is sanctioned a pre- arranged limit with the freedom to borrow as much money as he requires. In case of flow of credit to the account, he can withdraw afresh subject to the limit sanctioned. As such, the limit works as a revolving line of credit. Bank charges interest on the outstanding balances.Cash lossesCash losses mean net losses minus depreciation.Cheque Collection PolicyCheque Collection Policy refers to the policy followed by a bank in respect of various local and outstation cheques and instruments deposited with the bank for credit to an account. Compensation PolicyCompensation Policy refers to the policy followed by a bank for compensating its customers for the financial losses incurred by them (the customers) due to the acts of omission or commission on the part of the bank.Credit facilities/ Bank LoanCredit facilities from the bank may be in the form of a term loan or in the form of overdraft or cash credit that is extended by a bank to its customer for a specified period and he is charged interest on the outstanding balances.Credit Information Companies (CICs)Credit Information Companies are companies formed and registered under the Companies Act, 1956 and which have been granted a Certificate of Registration by the Reserve Bank. These companies are empowered to collect data on credit from credit institutions who are its members and disseminatethe same after analysis, to its members and specified users.Current AccountA form of demand deposit wherefrom withdrawals are allowed any number of times depending upon the balance in the account or up to a particular agreed amount.CustomerAn MSE or its authorised representative who has an account with a bank or who avails of other products/ services from a bank.Deceased accountA Deceased account is a deposit account in which case either the single account holder has deceased or in case of joint accounts one or more of joint account holders has/have deceased.Demat accountsA Demat account refers to dematerialised account and is an account in which the stocks of investors are held in electronic form.Deposit Accounts
• “Savings deposits” means a form of demand deposit which is subject to restrictions as to the number of withdrawals as also the amounts of withdrawals permitted by the bank during any specified period.
• “Term deposit” means a deposit received by the bank for a fixed period withdrawable only after the expiry of the fixed period and includes deposits such as Recurring/Short Deposits/Fixed Deposits/ Monthly Income Certificate/Quarterly Income Certificate etc.• “Notice Deposit” means term deposit for specific period but withdrawable on giving at least one complete banking day’s notice.Electronic Clearing ServiceThe Electronic Clearing Service (ECS) is an online transmission system which permits the electronic transmission of payment information by the banks/branches to the Automated Clearing House (ACH) via a communication network.Electronic Funds TransferElectronic Funds Transfer (EFT) is a scheme introduced by RBI to help banks to offer their customers facility of transfer of funds from account to account from one bank branch to another in places where EFT service is available.EquityEquity means a part of capital of a corporate entity that is represented by the shares of the company whether in physical or dematerialised form.FactoringFactoring is a financial option for the management of receivables. It is the conversion of credit sales into cash.Government bondGovernment bond means a security, created and issued by the Central or State Government for raising a public loan.GuaranteeA promise given by a person.Improper conduct of account
Issuing of cheque on the account without sufficient balance in the account; frequent returns of inward / outward cheques in the account; account has been overdrawn, or the account holder has exceeded its agreed credit limit; non compliance of KYC procedure; fraud/malfeasance or fraudulent intention exhibited by the customer; suspicious transactions/ engagement in money laundering activity under the scope of PMLA Act, 2002 etc. are instances of improper conduct of account.Letter of CreditA letter of credit is a document issued by a bank, which usually provides an irrevocable undertaking for payment to a beneficiary against submission of documents as stated in the Letter of Credit.MailMail is a letter in a physical or electronic form.Merchant ServicesMerchant services generally refer to merchant accounts allowed to trading and service establishments for acceptance of payments through credit/ debit cards. The cards may be accepted over the counter through card terminals i.e. Point of Sale (POS) machines or over phone or through internet.Micro and Small EnterprisesMicro and Small Enterprises are those enterprises engaged in manufacturing or rendering services.A micro enterprise is defined as:An enterprise engaged in the manufacture or production of goods pertaining to any industry where the investment in plant and machinery does not exceed Rs. 25 lakhorAn enterprise engaged in rendering services where investment in equipment does not exceed Rs. 10 lakh.A small enterprise is defined as :An enterprise engaged in manufacture or production of goods pertaining to any industry where the investment in plant and machinery is more than Rs. 25 lakh but does not exceed Rs. 5 croreorAn enterprise engaged in rendering services where investment in equipment is more than Rs. 10 lakh but does not exceed Rs. 2 crore.National Electronic Funds TransferNational Electronic Funds Transfer (NEFT) system is a nation-wide funds transfer system to facilitate transfer of funds from one bank branch to any other bank branch in the country.Net worthNet worth means sum of Capital and free reserves minus accumulated losses.Nomination FacilityThe nomination facility enables the bank to: make payment to the nominee of a deceased depositor, of the amount standing to the credit of the depositor, return to the nominee, the articles left by a deceased person in the bank’s safe custody, release to the nominee of the hirer, the contents of a safety locker, in the event of death of the hirer.Non-Fund based facilityNon-fund based facilities are such facilities extended by banks which do not involve outgo of funds from the bank when the customer avails the facilities but may at a later date crystallise into financial liability if the customer fails to honour the commitment made by availing these facilities. Non-fund based facilities are generally extended in the form of Bank Guarantees, Acceptances and Letters of Credit.Non Performing AssetA Non Performing Asset (NPA) is a loan or an advance wherei) interest and/ or installment of principal remain overdue for a period of more than 90 days in respect of a term loan.ii) the account remains ‘out of order’ in respect of an Overdraft/Cash Credit (OD/CC).iii) the bill remains overdue for a period of more than 90 days in the case of bills purchased or discounted.OriginatorAn organisation which collects payments from a customer’s account in line with customer’s instructions.Other Security InformationA selection of personal facts and information (in an order which the customer knows), which may be used for identification when using accounts.Out-of-date (stale) chequeA cheque, which has not been paid because the date written on the cheque is a date exceeding three months from the time of its presentation.‘Out of Order’ statusAn account should be treated as ‘out of order’ if the outstanding balance remains continuously in excess of the sanctioned limit/drawing power. In cases where the outstanding balance in the principal operating account is less than the sanctioned limit/drawing power, but there are no credits continuously for 90 days as on the date of Balance Sheet or credits are not enough to cover the interest debited during the same period, these accounts should be treated as ‘out of order’.OverdueAny amount due to the bank under any credit facility is ‘overdue’ if it is not paid on the due date fixed by the bank.PANThe Permanent Account Number (PAN) is an all India unique Number having ten alphanumeric characters allotted by the Income Tax Department, Government of India. It is issued in the form of a laminated card. It is permanent and will not change with change of address of the assessee or change of Assessing Officer.PasswordA word or a set of numbers or an alphanumeric combination for an access code, which the customer has chosen, to allow him to use a phone or Internet banking service. It is also used for identification.Payment and Settlement SystemPayment and Settlement System means financial system creating the means for transferring money between suppliers and user of funds usually by exchanging debits or credits among financial institutions.PINA confidential number, use of which along with a card allows customers to pay for articles/services, withdraw cash and use other electronic services offered by the bank.Real Time Gross SettlementThe acronym ‘RTGS’ stands for Real Time Gross Settlement. RTGS system offers the fastest means of transfer of funds through banking channel. Settlement of transactions under RTGS takes place on one-to-one basis, which is termed as ‘Gross’ settlement and in ‘real time’ i.e. without any waiting period.ReasonableGoverned by or being in accordance with reason and sound thinking; being within the bounds of common sense; not excessive or extreme.RepossessionRepossession is the process by which a creditor with a loan secured on house or goods (e.g. car) takes possession of the security, if the debtor does not repay as per the terms of the loan agreement.Rehabilitation PackageRehabilitation package is the package drawn for the rehabilitation of a sick unit. The package has to be drawn in accordance with the RBI stipulations and it usually consists ofi) Working Capital with relaxation in the rate of interest in terms of regulatory guidelinesii) Funded Interest Term Loaniii) Working Capital Term Loaniv) Term Loanv) Contingency Loan AssistanceSmart CardsA smart card is a plastic card about the size of a credit card, with an embedded microchip which can process data. It provides a secure way of identification, authentication and storage of data. It can be used for telephone calling, electronic cash payments, and other applications.SecurityRepresents assets used as support for a loan or other liability. In the event of the borrower defaulting on the loan, the lender bank can claim these assets in lieu of the sum owed.Primary security is the asset created out of the credit facility extended to the borrower and / or which is directly associated with the business / project of the borrower for which the credit facility has been extended.Collateral security is any other security offered for the said credit facility. For example, hypothecation of jewellery, mortgage of house etc. Servicesi) In respect of small and micro service enterprises, services refer to small road and water transport operators, small business, professional and self-employed persons, and all other service enterprises.ii) Services rendered by the banks include various facilities like remittance (issue of DDs, MTs, TTs etc), receipt and payment of cash, exchange of notes and foreign exchange etc. provided by the banks to the customers.Sick UnitSick unit refers to a unit whose account has remained substandard for more than six months or there has been erosion in net worth due to accumulated cash losses to the extent of 50% of the net worth during the previous accounting year and the unit has been in commercial production for at leasttwo years.SubstandardA substandard asset would be one, which has remained NPA for a period less than or equal to 12 months.Tariff ScheduleThe schedule containing charges levied by a bank on the products and services offered by it to its customers.Unpaid ChequeThis is a cheque, which is returned ‘unpaid’ (bounced) by the drawee bank.

In November 2003, RBI constituted the Committee on
Procedures and Performance Audit of Public Services under the
Chairmanship of Shri S.S.Tarapore (former Deputy Governor) to address
the issues relating to availability of adequate Banking Services to
common man. The mandate to the Committee included identification of
factors that inhibited the attainment of best customer services and
suggesting steps to improve the quality of banking services to
individual customers. The Committee felt that in an effort to
continuously upgrade the package of services that banks offered to their
customers there was a need of benchmarking of such services. After in
depth study at the grass root level the Committee concluded that there
was an institutional gap for measuring the performance of banks against a
bench mark reflecting the best practices (Code and Standards).
Therefore, the Committee recommended setting up of the Banking Codes and
Standards Board of India
broadly on the lines of Banking Codes and Standards Board functioning in
U.K.

Among the existing institutional
structures, the Scheme of Banking Ombudsman, which has been functioning
for quite some time, does not look into systemic issues with a view to
enforcing a prescribed quality of service. Ideally, such a function
should be performed by a Self Regulatory Organisation (SRO) but in view
of the existing framework of the banking sector in India, it was felt
that an independent, autonomous Board will be best suited for the
function. Therefore, Dr. Y.V. Reddy, Governor, Reserve Bank of India, in
his Monetary Policy Statement (April 2005) announced setting up of the
banking Codes and standards Board of India in order to ensure that
comprehensive code of conduct for fair treatment of customers was
evolved and adhered to.

The Banking Codes and Standards Board
of India has been registered as a separate society under the Societies
Registration Act, 1860. Therefore, it would function as an independent
and autonomous body.

The Banking Codes and Standards Board of India is not
a Department of the RBI. Reserve Bank has agreed to lend it financial
support for a limited period. It is an independent banking industry
watch dog to ensure that the consumer of banking services get what they
are promised by the banks.

To ensure that the Board really
functions as an autonomous and independent watchdog of the industry, the
Reserve Bank also decided to extend financial support to the Board by
way of meeting its full expenses for the first five years. This was to
enable the Board to reach its economic critical mass that will make it
truly independent in its functioning and take a view on any bank without
its existence coming under any threat. On its part, RBI would derive
supervisory comfort in case of banks which are members of the Board. In
substance, the Board has been set up to ensure that common man as a
consumer of financial services from the banking Industry is in a no way
at a disadvantageous position and really gets what it has been promised.

Wednesday, 21 November 2012

The Reserve Bank of India (RBI) on 16 November 2012 signed a Memorandum
of Understanding (MoU) with the State Bank of Vietnam (SBV) for
promoting greater co-operation and sharing supervisory information,
between the two supervisors.

The MoU between the two banks was
signed at Hanoi, Vietnam in the Headquarters of State Bank of Vietnam
and by the Chief General Manager-In-Charge, Department of Banking
Supervision, RBI- G. Jaganmohan Rao and Chief Inspector, Banking
Supervision Agency, SBV- Nguyen Huu Nghia. The Deputy Governor, SBV-
Dang Thanh Binh, and Indian Ambassador to Hanoi- Ranjit Rae graced this
occasion of signing the MoU.

The number of ATMs in India has crossed the one lakh mark, according to
the National Payments Corporation of India (NPCI). All the banks put
together have plans to install an additionally about one lakh ATMs over
the next two years, raising the number of ATMs per million population to
about 170 ATMs from 85.

As of October 2012 the total number of ATMs was 1,04,500. Public sector
banks and the State Bank group with about 61,500 ATMs accounted for 59
per cent of the ATMs. The private sector and foreign banks put together
have about 41,800 ATMs accounting for 40 per cent of the ATMs and the
balance 1 per cent represents about 1,150 ATMs that have been deployed
by co-operative banks/RRBs.

Almost all the ATMs in the country are part of NPCI’s National Financial
Switch (NFS) network which facilitates routing of ATM transactions
through inter-connectivity between the bank's systems, thereby enabling
ATM/debit cardholders of the country to utilise the services in any ATM
of a connected bank.

Nearly 200 million transactions are processed every month in NFS, of
which 75 per cent are cash withdrawal transactions with an average
ticket size of Rs 3,300. The balance 25 per cent transactions are
non–financial transactions.

Besides cash withdrawal and balance Inquiry transactions, NFS supports
other Value Added Services (VAS) such as pin change and mini statement
through the ATMs. There are plans to increase the VAS through
Card-to-Card transfer, cheque book request and statement request through
the ATMs.

The borderless prepaid card is going to enable travellers with an option of loading eight currencies on a single card that is US Dollars, British Pounds, Euro, Australian Dollars, Canadian Dollars, Swiss Francs, Singapore Dollars and Japanese Yen.

The borderless prepaid card is basically a multi-currency card which has a validity of five years. The person carrying the card is liable for getting the visiting country’s currency loaded on the card which enables him to save money and time.

The borderless prepaid card come up with an embedded chip and PIN which ensures security and increased protection against counterfeiting and skimming card frauds.

The company is also offering a free replacement of the card within 72 hours if in case it is stolen or had been lost. It also has 24x7 global emergency assistance via toll free access in over 80 countries.

The master card came to this idea after a Consumer Segmentation Study in which they had found that around 36.7 per cent affluent Indians want to go overseas for a holiday.

The collaboration with MasterCard, is supposed to grant an acceptance at over 34.3 million merchant establishments, e-commerce websites and access to 2 million ATMs.

Monday, 22 October 2012

1. Who among the following never discharged the duties as the Governor of Reserve Bank of India?1) Man Mohan Singh
2) M. Narasimham3) P.Chidambaram
4) R. N. Malhotra5) Dr. Bimal Jalan

2. On 5th October 2012, World Bank agreed to provide loan of $ 500 million to India for?1) Infrastructure projects in the Southern Part of Western Ghats.2) Upliftment of poor people residing in Andaman Nicobar Islands.3) Repairing the old dams in the Coastal parts of Karnataka.4) Providing the water to the region of Bhundelkand.5) Secondary Education Project named Rashtriya Madhyamik Shiksha Abhiyan (RMSA).

3. On 16th October 2012, an Indian-American Banker Vikram Pandit resigned as the CEO of ?1) BNP Paribas Group
2) ICICI Group3) Axis Group
4) Federal Bank Group
5) Citi Group

7. Days list given. Pick the incorrect one.1) International Day of the Older Persons - 1 October2) World Habitat Day - First Monday of October every year3) UN International Day for National Disaster Reduction - 13 October4) World White Cane Day (Guiding the Blind) - 16 October5) International Day for the Eradication of Poverty -17 October

Muthoot Finance Ltd has received the Golden Peacock Award for ‘Excellence in Corporate Governance’ for the year 2012 in London. The award ceremony hosted by Institute of Directors (IOD) at the London Global Convention 2012 was given on the basis of recommendations of the jury headed by Justice P.N. Bhagawati, former Chief Justice of India and member of the UN Human Rights Commission.

Thursday, 18 October 2012

Centre of Science and Environment (CSE) on 17 October 2012 announced
Partnership with Hongkong and Shanghai Banking Corpoartion Ltd (HSBC) to
set up modern Environment Training Institute in Alwar district of
Rajasthan.

The Institute that will set up will be offering short
and long term courses on Environmental governance for regulators and
decision makers.

Both the organization will be improving
environmental governance in India by building capacity of environment
regulators, non-government organizations and industry.

The
institute will cover the multiple research disciplines such as air
pollution, water and waste water management, climate change, sustainable
industrialisation and urbanisation, renewable energy, public transport
and mobility and environment impact assessment.

The Institute is going to be developed as an incubation, development and demonstration centre for green technologies. Centre of Science and Environment (CSE)

The
Centre for Science and Environment (CSE) is a public interest research
and advocacy organisation based in New Delhi. It was founded in 1980.
CSE researches into, lobbies for and communicates the urgency of
development that is both sustainable and equitable.

Tuesday, 16 October 2012

ICICI Bank on 15 October 2012 signed a memorandum of understanding (MoU)
with Ecobank Transnational Incorporated of Africa in order to extend
their banking services across their combined footprint in India and
Africa.

The MoU was signed in Tokyo by Vijay Chandok, President -
International Banking Group of ICICI Bank Ltd and Arnold Ekpe, Group
CEO of Ecobank.

India’s trade with Africa has doubled in the past
four years. Stronger investment ties are complementing this steady
growth in trade with Indian investments in Africa across a range of
sectors including oil & gas, pharmaceuticals, petrochemicals,
fertilizers, IT and infrastructure.

About Ecobank

Eco
bank is a pan-African banking conglomerate, with banking operations in
35 African countries. It is the leading independent regional banking
group in West Africa and Central Africa, serving wholesale and retail
customers. Ecobank was incorporated in Lome, Togo. Ecobank Transnational
Incorporated is the parent company of the leading independent
pan-African banking group. About ICICI Bank

ICICI
Bank Limited is India's largest private sector bank and the second
largest bank in India, with consolidated total assets of US $ 111
billion as on June 30, 2012.It is the second largest bank in India by assets and third largest by market capitalization.

Thursday, 11 October 2012

1. Which of the following is known as Plastic Money?A) Demand Draft
B) Credit CardC) Debit Card1) Only A
2) Only B
3) Only C4) Both B and C
5) All A, B and C

2. KYC guidelines followed by banks have been framed on the recommendations of the ...........1) Ministry of Home Affairs2) Ministry of Information Technology and Human Resource Development3) Indian Banks Association4) Ministry of Finance5) Reserve Bank of India

3. Business Correspondents in banking are for:1) Providing services for the Platinum Customers2) Providing services for children3) Serving the educational institutions4) Serving the weaker sections of society5) None of these

4. What is the full form of FDI?1) Foreign Development Investment2) Fiscal Development Investment3) Foreign Direct Investment4) Fiscal Direct Investment5) None of these

5. CMD of a public sector bank is appointed by:1) Reserve Bank of India2) Indian Banks Association3) Central Government4) Respective Bank's Board of Directors5) None of these

6. What is the current Statutory Liquidity Ratio?1) 23 %
2) 24 %3) 20%
4) 4.5%
5) None of these

Tuesday, 9 October 2012

The Reserve Bank of India (RBI) is open to looking at increasing the
limit on international e-commerce transactions now set at $3,000, a top
official said on October 8.

“If the system wants the limit to be enhanced, that is something that we
are positively inclined to look at,” RBI Executive Director G.
Padmanabhan said on the sidelines of a CII event.

Mr. Padmanabhan said the limit was set in consultation with PayPal, a
major player among the international payment gateways, and added that as
many as 99 per cent of the e-commerce transactions fell under the limit
of $3,000.

Rationale

Giving rationale for setting the limit (there are no limits for domestic
e-commerce transactions), he said it was needed in a country like India
which had exchange controls.

On extending trading hours in the forex market, the RBI official said it
was difficult to relax as “we do not have full capital account
convertibility.”

Friday, 5 October 2012

HDFC Bank on 4 October 2012 tied up with Indian Oil Corporation where
rural Petrol Pump Outlets of Indian Oil will act as HDFC Bank Business
Correspondent (BCs). It is unique and first kind of tie-up, where
an oil distribution company is coming up with the bank to make
available modern banking services to the people of remote areas. The
Indian oil is going to make it possible through Kisan Seva Kendra which
is an retail outlet model pioneered by Indian Oil to cater to the needs
of customers in the rural segment.

HDFC Bank planned to cover
1000 Kisan Seva Kendras in a phased manner and each of these outlets
will be able to serve around 1,500 customers. The Kisan Seva Kendra
outlets will offer banking services such as preliminary processing of
loan applications, disbursal and collection of small value deposits,
sale of micro-insurance, mutual funds and other investment instruments. HDFC plan is to bring 10 million families into its banking Fold.

Saturday, 29 September 2012

British banking major Standard Chartered Plc appointed former SBI
chairman O P Bhatt as board member. The appointment of 61-year old
Bhatt, as an independent non-executive director, would be effective from
January 1, 2013.

“Bhatt is a career banker with over 30 years banking experience and
retired as Chairman of the State Bank Group in 2011,” StanChart said in a
statement.

State Bank Group includes SBI, India’s largest commercial bank and five associate banks.

He is among the four new independent non-executive directors appointed
by StanChart as part of efforts to enhance the experience, depth and
diversity of its board.

The three other new directors are Lars Henrik Thunell, Margaret Ewing
and Louis Chi-Yan Cheung. The appointments of Thunell and Ewing would be
effective from November 1, 2012, that of Bhatt and Cheung would be from
January 1, 2013. Bhatt had also headed the Indian Bank’s Association.

HDFC Bank on September 29 joined hands with Punjab Grains
Procurement Corporation Ltd (PUNGRAIN) to facilitate payment to its
commission agents spread over 350 mandis in Punjab.

PUNGRAIN,
in its initiative has decided to make payment to their commission
agents through ‘RuPay Debit card’ and has developed the Kisan Arhtia
(commission agents) information and Remittance Online Network (KAIRON)
with the help of National Payment Corporation of India (NPCI).

For
this project, HDFC Bank will install its Point of Sales (POS) machines
in over 350 mandis to facilitate the payment to commission agents
dealing in agriculture products.

It said this initiative will facilitate faster payments to them and in turn will benefit farmers.

HDFC
Bank, in order to facilitate a successful implementation of this
project, organised a day’s training session for nodal officers along
with food inspectors of PUNGRAIN.

UK-based global banking giant HSBC Holdings Plc
said N.R. Narayana Murthy, co-founder of IT giant Infosys and the only
Indian on its board, would retire as its director at the end of 2012.
Announcing the changes in its board and board committees, HSBC Holdings
Plc said in a regulatory filing here that Renato Fassbind, former Chief
Financial Officer of Credit Suisse Group, has been appointed a Director
with effect from January 1, 2013. Besides, Fassbind would also become a
member of the Group Audit Committee and the Group Remuneration Committee
with effect from March 1, 2013. He will be an independent non-executive
Director. Murthy will retire as a Director of HSBC Holdings plc on
December 31 and will be succeeded as Chairman of the Corporate
Sustainability Committee by Laura Cha.

While Cha is
already a director, Murthy had joined the board in 2008. James
Hughes-Hallett has also been appointed a member of the Corporate
Sustainability Committee from January 1, 2013.

Fassbind was the Chief Financial Officer and a member of the executive
board of Credit Suisse Group from June 2004 until September 2010. He is
Vice-Chairman of Supervisory Board of Swiss Reinsurance Company, and a
member of the Supervisory Board of the Swiss Federal Audit Oversight
Authority.

Friday, 21 September 2012

Previously, Foreign Direct Investment (FDI) is prohibited in retail trading, except in single-brand product
retail trading, in which FDI, up to 100%, is permitted, under the Government route, subject to
specified conditions.

Now, The Government of India has reviewed the extant policy on FDI and decided to permit FDI,
up to 51%, under the Government route, in Multi-Brand Retail Trading, subject to specified
conditions.

Foreign technology collaboration in any form, including licensing for franchise,
trademark, brand name, management contract, is also prohibited for Lottery Business and
Gambling and Betting activities.

FDI in multi brand retail trading, in all products, will be permitted,
subject to some conditions, such as:

Minimum amount to be brought in, as FDI, by the foreign investor,
would be US $ 100 million.

Retail sales outlets may be set up only in cities with a population of
more than 10 lakh as per 2011 Census and may also cover an area of
10 kms around the municipal/urban agglomeration limits of such
cities.

Government will have the first right to procurement of agricultural
products.

The above policy is an enabling policy only and the State
GovernmentslUnion Territories would be free to take their own
decisions in regard to implementation of the policy. Therefore, retail
sales outlets may be set up in those StateslUnion Territories which
have agreed, or agree in future, to allow FDI in MBRT under this
policy.

Thursday, 20 September 2012

2.
Which Indian author has been short listed for this year's Man Booker
Prize for his novel 'Narcopolis', a dark tale about the opium and heroin
dens of Mumbai? 1) Aravind Adiga
2) Jeet Thayil 3) Amitav Ghosh 4) Chetan Bhagat 5) Rahul Bhattacharya

3.
John Baird visited India and held talks with S.M.Krishna in September
2012. Baird is the Foreign Minister of which of the following countries? 1) France
2) Argentina 3) Canada
4) U.K. 5) Australia

4. Prince Salman bin Abdul Aziz was named the crown prince of which of the following countries on June 18, 2012? 1) Kuwait
2) Bahrain 3) Yemen
4) Oman 5) Saudi Arabia

5. Which of the following state-ments about G-20 is not true? 1) The G-20 includes 19 country members and the European Union. 2) G-20 was started in 2008 and accounts for 2/3rd of world's population and 80% of the world's GDP. 3) The seventh G-20 Summit was held at Los Cabos, Mexico on June 18-19, 2012. 4) The next G-20 Summit will be held in September 2013 in Saint Petersburg, South Africa. 5) At the Los Cabos Summit BRICS countries have pledged $75

6. Who took over as Director of the Bhabha Atomic Research Centre (BARC), Trombay from Ratan Kumar Sinha on June 19, 2012? 1) S.K.Jain
2) V.K.Saraswat 3) Srikumar Banerjee 4) Sekhar Basu 5) None of these

7. What is the new name of the former Soviet aircraft carrier Admiral Gorshkov, which has been procured by India? 1) INS Vikrant
2) INS Viraat 3) INS Vikramaditya 4) INS Chakra
5) INS Arihant

9.
American President Barack Obama awarded the Presidential Medal of
Freedom to Shimon Peres on June 13, 2012. Peres is the President of
which of the following countries? 1) Poland
2) Belarus 3) Israel
4) Germany 5) Slovakia

10.
The Nuclear Power Corporation of India Limited (NPCIL) will launch how
many reactors during the 12th Plan period (2012-2017)? 1) 12
2) 16
3) 10 4) 11
5) 13

Wednesday, 19 September 2012

HDFC Bank on 5 September 2012 announced the launch of credit card for
teachers, coinciding with the celebration of Teachers Day. The card
offers special features like multiple reward points, weekend bonanza
points, petrol surcharge waiver and 500 special gift reward points to be
credited annually on the Teachers day.
With a combined market size of more than 450 million students and
growth rates of 10-15 per cent expected over the next decade, education
is one of the largest service sectors in India. In fact, it is the
largest issuer of credit cards in the country with a customer base of
5.60 million as of 31 March, 2012.

Thursday, 6 September 2012

The World Bank on 5 September, 2012 named as its chief
economist, placing a candidate from an emerging market country in a key position
at the global development lender.
Basu, who was most recently chief economic adviser to the government of India,
is the World Bank's second chief economist from a developing country. He
replaces Justin Lin, a citizen of China, whose term expired on June 1, 2012.
Basu, who holds a Ph.D. from the London School of Economics, is on leave from
his position as a professor of economics and international studies at Cornell
University in New York. He previously founded the Centre for Development
Economics at the Delhi School of Economics.
Emerging market countries have long pushed for more clout at the
poverty-fighting World Bank and its sister institution, the International
Monetary Fund.
Starting from October, Basu will serve under new World Bank President Jim Yong
Kim, a Korean-American and who took the helm of the World Bank two months ago.

4. NAV is the price of
1) Entire fund value
2) one unit of a fund
3) surrender value
4) average value of shares
5) dividends paid in a year

5. A master policy in the case of Life insurance indicates
1) policy is sale
2) policy is in the name of servant
3) only one life is assured
4) there are several beneficiaries
5) life assured should be a male

Tuesday, 28 August 2012

Jammu and Kashmir Bank on 20 August 2012 won four national awards-The Sunday Standard FINWIZ-2012 Best Bankers’ Awards. The Bank was awarded Best Banker in Financial Inclusion and Customer Friendliness and declared runner up for Best Banker in Priority Sector Growth and Agricultural Credit.
The Sunday Standard is a part of the New Indian Express Group which
is based in Chennai. It had engaged Indicus Analytics- India’s premier
economic research agency- to conduct a survey and find out India’s best
bankers.
The surveyors highlighted the J&K Bank’s contribution in
facilitating the workings of the economy and contributing to its growth
by promoting entrepreneurs and innovation.

4. The Templeton Prize honors a living person who has made an
exceptional contribution to affirming life’s spiritual dimension. Who
won the 2012 Templeton Prize, the largest annual monetary award given to
an individual?
1) Martin Rees
2) Michael Heller
3) The Dalai Lama
4) Charles Taylor
5) Francisco Jose Ayala

7. Which of the following films was declared the Best Children Film at the 59th National Film Awards for the year 2011?
1) Stanley Ka Dabba
2) The Blue Umbrella
3) Keshu
4) Chillar Party
5) None of these

Credit Information Bureau (India) Ltd (CIBIL) is likely to bring in a “Risk Index” that will assist country’s banks in making faster decisions on extending loans to corporates and business houses.
Banks would be able to gauge the potential of a company in servicing its loan by looking at its position in the index.The Risk Index:

The Risk Index will be in the form of a score ranging from 300 to
900, a glance of which will provide the Bank the credit history of the
respective companies.

While Banks, currently, take the help of credit rating agencies who
provide a broader picture of the risk profile of the company on the
basis of their trade data and balance sheets, the Risk index will assist
lenders analyze the profile of business establishments.

2. India has signed Tax Information Exchange Agreement to promote economic Cooperation and Joint investment aimed at boosting bilateral trade that stands at 1.7 Billion Dollars with which of the following countries:
1) Russia
2) Nepal
3) United States
4) Bahrain
5) Srilanka

3. Which of the following states has maximum forest cover area in India as per the recent India state of Forest report?
1) Andhra Pradesh
2) Bihar
3) Tamil Nadu
4) Orissa
5) Madhya Pradesh

4. Which of the following countries is expected to become the 2nd largest producer of crude steel in the world by 2015:
1) USA
2) Russia
3) China
4) India
5) Iraq

5. Which of the following state governments has decided to re-impose property tax on buildings including residential in the state:
1) Tamil Nadu
2) Maharashtra
3) Madhya Pradesh
4) Haryana
5) Andhra Pradesh

6. Find the former Egypt president who has been awarded life sentence, for killing hundreds of protestors -
1) Hosni Mubarak
2) Mohammad Morsi
3) Al Thani
4) Bashar Al-Assad
5) None of these

7. In order to work on health and development related issues Microsoft co-founder and cochairman of Bill and Melinda Gates Foundation inked a Memorandum Of Understanding (MoU) with which of the following states :
1) Andhra Pradesh
2) Uttar Pradesh
3) Madhya Pradesh
4) Kerala
5) Karnataka

8. Who is the first Indian writer to win Ondaatje Prize for his book - 'The sly Company of People who Care' - which is about adventures of an Indian Journalist?
1) Chetan Bhagath
2) Sidney Sheldon
3) Shobha De
4) Rahul Bhattacharya
5) Jeffery Archer

9. The state which has created a new Limca record by holding the largest guitar ensemble of the country in which 5406 guitarists participated is :
1) Andhra Pradesh
2) Goa
3) Assam
4) Tripura
5) Manipur

3. India launched its third research station in Antarctica recently. What is its name?
1) Dakshin Gangotri
2) Maitri
3) Bharti
4) Bhuvan
5) Akash

4.
Ahmed Ben Bella passed away on April 11, 2012. He was the first
President of which of the following African countries from 1963 to 1965?
1) Morocco
2) Tunisia
3) Mauritania
4) Algeria
5) Egypt

5. Which of the following statements about the Nuclear Security Summit is not true?
1) The second Nuclear Security Summit was held in Seoul, South Korea on March 26-27, 2012.
2) The leaders from 53 nations called for strong steps to combat nuclear terrorism.
3) The leaders also called for safeguarding world stockpiles of Highly Enriched Uranium (HEU) and Plutonium.
4) The next Summit will be held in Washington in 2014.
5) The Prime Minister Dr. Manmohan Singh announced that India
would contribute 1 million US dollars to the IAEA's Nuclear Security Fund for 2012-13.

7. Who has been appointed as the Pakistan's High Commissioner to India?
1) Sherry Rehman
2) Hina Rabbani Khar
3) Salman Bashir
4) Riaz Mohammad Khan
5) None of these

8. N.K.P.Salve passed away recently. He was the former president of which of the following sports governing bodies?
1) AIFF
2) IOA
3) BCCI
4) ICC
5) IPL

9. Who was re-elected the General Secretary of the Communist Party of India (Marxist) in April 2012?
1) V.S.Achuthanandan
2) Prakash Karat
3) A.K.Padmanabhan
4) Buddhadeb Bhattacharjee
5) Sitaram Yechury

10. The Swavalamban pension scheme is targeted to benefit which of the following workers?
1) Anganwadi workers
2) Construction workers
3) Fishermen
4) Dairy workers
5) All the above

Thursday, 9 August 2012

1. Gagan Narang became the first Indian to win a medal at the London
Olympic Games on July 30, 2012 when he won a bronze medal in 10 metre
air rifle shooting. Who won gold medal in this event?
1) Alin George Moldoveanu (Romania)
2) Niccolo Campriani (Italy)
3) Wang Tao (China)
4) Zhu Qinan (China)
5) None

2.
Joyce Banda became the Presi-dent of which of the following African
countries on April 7, 2012?
1) Zambia
2) Tanzania
3) Malawi
4) Mozambique
5) Liberia

3.
Debabrata Sarkar assumed charge as the Chairman and Managing Director
of which of the following public sector banks on April 4, 2012?
1) UCO Bank
2) Andhra Bank
3) United Bank of India
4) Union Bank of India
5) None

4. Macky Sall assumed office as the President of which of the following African countries on April 2, 2012?
1) Senegal
2) Mali
3) Mauritania
4) Guinea
5) Guinea-Bissau

5.
Prodemocracy leader Aung San Suu Kyi's party won 43 seats in the
by-elections for Myanmar parliament in April 2012. What is the name of
her party?
1) National Unity Party (NUP)
2) Democracy and Peace Party (DPP)
3) Union Solidarity and Development Party (USDP)
4) National League for Democracy (NLD)
5) None

6.
RBI signed a pact with which one of the following countries' central
banks in April 2012 that will establish an arrangement for sharing of
supervisory inform-ation and enhancing cooperation in the area of
banking super-vision?
1) Pakistan
2) Qatar
3) UAE
4) Saudi Arabia
5) None of these

7. Which one of the following stat-ements about BRICS is not true?
1) The fourth BRICS Summit was organized in New Delhi on March 29, 2012.
2) The theme is "BRICS Partner-ship for Global Stability, Security and Prosperity".
3) The five countries considered the possibility of setting up a new development bank.
4) The leaders have advocated for reforms in World Bank, IMF and UN
Security Council by increasing representation from developing countries.
5) The next BRICS summit will be held in China in 2013.

8.
Gunter Grass, the German Nobel literature laureate, has accused which
of the following countries as a threat to world peace in his poem 'What
Must Be Said'?
1) Iran
2) Israel
3) Myanmar
4) North Korea
5) Syria

9.
In April 2012, the United States announced a reward of $ 10 million on
Hafeez Saeed, for his alleged role in the 2008 Mumbai terror attacks. He
is the founder of which of the following terrorist organizations?
1) Al Qaeda
2) Harkat-ul-Mujahideen
3) Lashkar-e-Taiba
4) Jaish-e-Mohammed
5) None

10. "My Unforgettable Memories" is a book written by which of the following political leaders?
1) Sharad Pawar
2) Mamata Banerjee
3) J.Jayalalitha
4)Naveen Patnaik
5) Narendra Modi

Wednesday, 8 August 2012

The Reserve Bank of India, constituted a committee to
suggest ways to strengthen the rural co-operative credit structure.

The panel, headed by Nabard Chairman Prakash Bakshi, will review the
existing short-term co-operative credit structure (STCCS), focussing on
structural constraints in the rural credit delivery system. It will also
explore ways to strengthen the rural co-operative credit architecture.
The seven-member panel will make an in-depth analysis of the STCCS, and
examine various alternatives with a view to reducing the cost of credit,
the RBI said in a release.

It will also look at the feasibility of setting up of a two-tier STCCS as against the existing three-tier structure.

The STCCS targets the credit requirement of the small and marginal farmers in the country.

“The panel will submit its report within three months from the date of its first meeting,” it said.

It will mainly assess the role played by State and district cooperative
banks in fulfilling the requirement of agriculture credit.

All registered non-banking financial companies (NBFCs) intending to
convert themselves into non-banking financial company-micro finance
institutions (NBFC-MFIs) must seek registration with immediate effect,
and, in any case, not later than October 31, the Reserve Bank of India
said in a notification.

The NBFCs have to maintain net-owned funds (NOF) at Rs..3 crore by March
31, 2013, and at Rs.5 crore by March 31, 2014, “failing which they must
ensure that lending to the micro finance sector, that is, individuals,
SHGs or JLGs, which qualify for loans from MFIs, would be restricted to
10 per cent of the total assets,” the RBI said in a notification. The
RBI made some modifications in the directions issued on December 2,
2011, to NBFC-MFIs.

In order to provide encouragement to NBFCs operating in the
north-eastern region, the minimum NOF is to be maintained at Rs.1 crore
by March 31, 2012, and at Rs.2 crore by March 31, 2014.

Thursday, 2 August 2012

1. Saina Nehwal won the Indonesian Open Super Series Premier tournament
in Jakarta in June 2012. This is her third Indonesian Open badminton
title in four years. Which of the following players did she defeat in
the final?
1) Shixian Wang
2) Sayaka Sato
3) Wang Yihan
4) Ji Hyun Sung
5) Li Xuerui

2. Alex Paul Menon was abducted on April 21, 2012 by the Maoists and
was released after 13 days. He is the district collector of which of the
following districts in Chhattisgarh?
1) Balod
2) Narayanpur
3) Bilaspur
4) Sukma
5) Dantewada3. Panch Parameshwar Yojana was launched in which of the following states recently for overall development of villages?
1) Bihar
2) Andhra Pradesh
3) Jharkhand
4) Madhya Pradesh
5) Himachal Pradesh

2. The Templeton Prize honors a living person who has made an
exceptional contribution to affirming life's spiritual dimension. Who
won the 2012 Templeton Prize, the largest annual monetary award given
to an individual?
1) Martin Rees
2) Michael Heller
3) The Dalai Lama
4) Charles Taylor
5) Francisco Jose Ayala

3. Gulab Kothari has won which of the following awards for the year 2011?
1) Saraswati Samman
2) Moorti Devi Award
3) Jnanpith Award
4) Vyas Samman
5) None of these

4. Ramadevarabetta in Ramana-garam district has been declared as a vulture sanctuary. In which state is this sanctuary located?
1) Kerala
2) Tamil Nadu
3) Karnataka
4) Maharashtra
5) None of these

7. Which of the following films was declared the Best Children Film at the 59th National Film Awards for the year 2011?
1) Stanley Ka Dabba
2) The Blue Umbrella
3) Keshu
4) Chillar Party
5) None of these

8. As per a report released by the Stockholm International Peace
Research Institute (SIPRI) in March 2012, which country is the world's
largest importer of arms?
1) India
2) South Korea
3) Pakistan
4) China
5) Singapore

10. Which Indian has been chosen for the Ramon Magsaysay Award for the
year 2012, for economic empowerment of thousands of women and their
families in Krishnagiri and Dharmapuri districts in Tamil Nadu?
1) Dr.Shanta Sinha
2) Kulandei Francis
3) Sandeep Pandey
4) Arvind Kejriwal
5) Neelima Misra

Tuesday, 10 July 2012

The General Anti Avoidance Rule (GAAR)-
proposed by the then Union Finance Minister Pranab Mukherjee during the
annual budget 2012-13- is anti-tax avoidance rule, drafted by the Union
Government of India, which prevents tax evaders, from routing
investments through tax havens like Mauritius, Luxemburg, Switzerland.
According to the draft, GAAR will come into effect from 1 April 2013.
As per the guidelines, FII not opting for treaty benefits and ready to
pay taxes will not come under GAAR, but those who do opt for dual
taxation avoidance agreements will come under its purview.
The Union Government was forced to defer the rules until 1 April
2013, as foreign investors had expressed their reservation about the
language used in the rules. Investors had maintained that the ambiguous
language used in the draft of the GAAR could lead to the misuse of the
rule.

Tax Havens:

Tax havens are countries which have low tax regimes which provide
individuals and business opportunities of tax avoidance or tax evasion.
There are roughly 45 tax havens in the world today. In Indian context,
Mauritius is considered to be the most significant tax havens or tax
evading route.
In more precise words the Mauritius route can be described
as a channel used by individuals and Multi National Companies to evade
paying taxes in India. The tax evasion in India through this route is
estimated to be in tune with 55 billion dollar, mostly attributed to the
loopholes in a bilateral agreement on double taxation.

Thursday, 5 July 2012

State Bank of Patiala (SBOP) on 2 July 2012 launched gold loan (Swarn
Shakti) for farmers against the security of gold ornaments to provide
free loans to the farmers without taking loan on land. It would make
farmers to meet their small and long term agricultural needs with crop
production, investment and consumption.

The maximum amount of loan is 10 lakh rupees and 30 percent
margin will be given by the farmers. The loan for crop production will
be charged at 7 percent per year up to 3 lakh rupees. Further, 3 percent
interest of financial support will be given to farmers who refund their
loans in time. Therefore, the actual rate of interest charged will be 4
percent. The total period to refund the amount will be 36 months
counting with harvesting season

Saturday, 23 June 2012

United Bank of India has received approval from Central Bank of Myanmar
for setting up of a representative office in Yangon. It is the first
Indian bank to have presence in the country, said a press statement
issued by the bank.

The bank has already received RBI’s approval for opening its
representative office in Myanmar, the bank’s Executive Director, Mr
Deepak Narang, had said recently. “…Though we will not be able to carry
out financial transactions through our representative office, we will
get leads which can then be routed into our branches,” he said.

Germany and nine other European Union nations will
press ahead with plans to introduce a financial market transaction tax,
following failed attempt for an agreement to levy it across the EU.

Finance
ministers of the 27-nation EU, who met in Luxembourg on Friday, came to
the conclusion that an agreement to impose the tax across the bloc will
not be possible in the foreseeable future, German Finance Minister, Mr
Wolfgang Schaeuble, told the media after the meeting.

Therefore,
10 nations who are willing to cooperate have decided to move forward by
taking the necessary steps on the national level, and to ask the
European Commission to draw up legislative proposals to introduce the
tax.

Besides Germany, supporters of the tax are
Austria, Belgium, France, Portugal, Slovania, Estonia, Greece, Slovakia
and Spain. Under the EU rules, the proposed tax can be introduced if at
least nine nations support it.

The European
Commission estimates that by charging a tax between 0.01 per cent and
0.05 per cent on a broad range of finance market transactions, more than
€30 billion could be raised annually.

There have
been several unsuccessful attempts in the past to reach an agreement to
introduce the tax in the EU as well as at the international level.

Its
supporters argue that the tax is necessary to stem excessive
speculations in the financial market, to reduce volatility and to
involve financial institutions in sharing the costs of future financial
bailouts.

The plan is vehemently opposed by Britain
and Sweden, which fear that it might lead to an exodus of businesses and
financial institutions from Europe and endanger growth.

Financial inclusion has become an emerging focus for policymakers around
the world, and it is nowhere more relevant than in India. Analysts
estimate that up to half the Indian households do not have a bank
account. In fact, the Census 2011 found that more than 40 per cent of
the population lives two km or more from the nearest bank branch or
agent.

For India to facilitate more balanced economic development, universal access to basic financial services is essential.

There are no easy solutions. Strict regulation of banking and other
financial services is vital to address money laundering, terrorist
financing and fraud.

INDIA’S UNBANKED

India’s formal financial services sector is yet to meet the growing
needs of a large part of the population. When it comes to domestic
remittances, 57 per cent of migrant workers in India use hawala couriers
and other informal channels to remit money, according to a recent
study.

Analysts estimate that almost 40 per cent of the participants in India’s
informal economy — which accounts for half the country’s gross domestic
product — resort to chit funds, barter and moneylenders for financing.

It is logical that an informal sector thrives in the absence of
convenient, reliable, speedy and regulated financial services. The risk
of unabated informal and or illegal financial traction and its risk on
national/consumer security and impact on a country’s monetary policy
require no debate.

The need for increased access to formal financial services is an
important and urgent policy objective not only for India but also for
its main trading partners, including its key remittance sending
countries.

The World Bank published a pivotal report in June 2010, Inclusive
Finance, which provides a standard definition of financial inclusion.
The bank said that affordability, availability and convenience, and
quality are key features. It also subdivided financial inclusion into
four product types: payments, savings, insurance and credit.

When Western Union commenced offering international money transfers in
1993, the company remitted money from 41 countries into India. Today,
Western Union remits money from more than 190 countries and territories
into India. This is a significant progression in facilitating financial
inclusion.

Last month, Western Union announced the opening of its 100,000th agent
location in India. Western Union’s agents and sub-agents include banks,
post offices, grocery and convenience stores and many other types of
businesses.

If India were to deliver payment, saving, insurance and credit products
to half the population, it seems logical that — subject to careful
screening of providers, efficient regulatory oversight and appropriate
limits — the way forward is to take advantage of existing broad-based
networks and new consumer technology to selectively open financial
services to non-banks, while promoting cooperation among all sectors.

TECHNOLOGY POTENTIAL

Western Union’s experience gives clear evidence that non-bank financial
institutions can foster increased demand for local banking and financial
services. For example, Western Union’s insights reveal that in India,
the banking access rate for receivers of cash remittances is more than
double (51 per cent) that of sending overseas workers themselves (22 per
cent).

Many recipients open bank accounts to receive these transfers and, by
doing so, give themselves the opportunity to access the full range of
banking services. Linking payments received to savings accounts is
clearly a way to promote financial inclusion.

Could mobile phone wallets be linked to inward remittances? Could
pre-paid cards provide a new financial mechanism for the unbanked? Could
village corner stores expand to serve as the agent, not only of Western
Union, but of a bank, providing basic, yet fundamental financial
services? How does India facilitate greater usage of formal channels for
domestic remittances?

Advances in technology have opened up new ways to deliver reliable,
transparent, easily monitored and regulated financial services. Large
commercial networks already exist that link every corner of India,
including that of Western Union. The country is at the forefront of the
IT revolution.

There is already a common will of government and businesses to achieve
the objective of financial services for all. What is required next is a
collaborative approach.

India’s regulators are already moving leaps and bounds in this
direction. In a clear sign of its increasing influence on the global
financial stage, India recently become the newest member of CGAP
(Consultative Group to Assist the Poorest), the independent policy and
research centre housed at the World Bank dedicated to improving
financial access for the world’s poor. India is the first from emerging
markets to join CGAP.

India’s membership is a commendable signal that the Government is
committed to providing financial access to the more than 2.5 billion
working-age adults under-served by mainstream financial services.

1. For the development of the banking facilities in the rural areas the
Imperial Bank of India was partially nationalised on—
(A) June 1, 1940
(B) June 1, 1942
(C) July 1, 1955
(D) July 1, 1949Answer:July 1, 1955

2. The Imperial Bank of India was named as the—
(A) Reserve Bank of India
(B) State Bank of India
(C) Union Bank of India
(D) Bank of IndiaAnswer:State Bank of India

3. Which is/are not an associated bank of SBI ?
(A) The State Bank of Hyderabad
(B) The Union Bank of India
(C) The State Bank of Bikaner and Jaipur
(D) The State Bank of MysoreAnswer:The Union Bank of India

4. In order to have more control over the banks, 14 large commercial banks whose
reserves were more than Rs. 50 crore each were nationalized on—
(A) 19th July, 1969 (B) 19th July, 1970
(C) 19th July, 1971 (D) 19th July, 1972Answer:19th July, 1969

Friday, 25 May 2012

ATM- Automated Teller Machine is a machine uses a
computer that verifi es your account information and PIN (Personal
Identification Number) and will dispense or deposit funds per your
request)Annuity- Fixed amount of cash to be received every year for a specified period of time

Asset/Liability Risk- A risk that current obligations/ liabilities cannot be met with current assets. Assets- Things that one owns which have value in financial terms.

Banking Cash Transaction Tax (BCTT) - BCTT is a small tax on cash withdrawal from bank exceeding a particular amount in a single day

Bank Debits - Sum of the value of all cheques and other instruments charged against the deposited funds of a bank’s customer.

Bank Rate - Interest rate paid by major banks if they borrow from RBI, the Central Bank of the country.

Bank Statement -
A periodic record of a customer’s account that is issued at regular
intervals, showing all transactions recorded for the period in question

Basis Point- Basis Point is one-hundredth of one percentage point (i.e. 0.01%), normally used for indicating spreads or cost of finance.

Balance of Payment (BoP) –
BoP is a statement showing the country’s trade and financial
transactions (all economic transactions), in terms of net outstanding
receivable or payable from other countries, with the rest of the world
for a period of time

BR Act - Banking Regulation Act

Cash reserve Ratio (CRR) -
CRR is the amount of funds that the banks have to keep with the RBI. If
the central bank decides to increase the CRR, the available amount with
the banks comes down

Certificate of Deposit (CD) - CD is a negotiable instrument issued by a bank evidencing time deposit

Cheque - A written order on a bank instrument for payment of a certain amount of money.

C-D ratio- Credit- Deposit Ratio

Corporate Banking - Banking services for large firms

CRAR - Capital to Risk-Weighted Assets Ratio

Credit Crunch - Fall in supply of credit even though there is sufficient demand for it

Cross default -
Two loan agreements connected by a clause that allows one lender to
recall the loan if the borrower defaults with another, and vice versa.

Deposit: A check or cash that is put into your bank account.

Endorse: To sign the back of your check before cashing or depositing it, as proof that you are the person the check was written out to.

Equitable mortgage -
Mortgage under which one still owns the property which is security for
the mortgage. The owner can occupy or live in the property

Exchange Rate - The rate at which one currency may be exchanged for another

FRNs - Floating Rate Notes

Fixed assets -
Assets such as land, buildings, machinery or property used in operating
a business that will not be consumed or converted into cash during the
current accounting period

Fixed Rate - A predetermined rate of interest applied to the principal of a loan or credit agreement

IFSC Code -
Indian Financial System Code or IFSC code is an eleven character code
assigned by RBI to identify every bank branches uniquely, that are
participating in NEFT system in India

Liquidation – Liquidation is divestment of all the assets of a firm so that the firm ceases to exist

Liquidity-
The extent to which or the ease with which an asset may quickly be
converted into cash with the least administrative and other costs

Letter of Credit (LC) - A
formal document issued by a bank on behalf of a customer, stating the
conditions under which the bank will honour the commitments of the
customer

Line of Credit - pre-approved credit
facility (usually for one year) enabling a bank customer to borrow up to
the specified maximum amount at any time during the relevant period of
time.

MICR- Magnetic Ink Character Recognition or MICR is the bottom line on all checks. It is printed using a special font.

Monthly Statement:
statement received by customers at the end of the month about the
account’s activity (what went in and what came out) from the previous
month.

NEFT- national electronic funds transfer

Non Performing Assets (NPA) -
When due payments in credit facilities remain overdue above a specified
period, then such credit facilities are classified as NPA.

NBFCs- Non-banking Finance Companies

NHB- National Housing Bank

Overdraw: To write a check for more money than what is present in the account. Usually there is a fee (known as NSF/non-sufficient funds)

Principal- Principal
is the amount of debt that must be repaid. Also means a person who
deals in securities on his own account and not as a broker

Prime Lending Rate (PLR) - The rate of interest charged on loans by banks to their most creditworthy customers

PSB - Public Sector Bank

Repo rate- the rate at which the RBI lends money to banks

Reverse repo rate- Reverse Repo rate is the rate at which the RBI borrows money from commercial banks

SCBs - Scheduled Commercial Banks

Statutory Liquidity Ratio- SLR
is Statutory Liquidity Ratio. It’s the percentage of Demand and Time
Maturities that banks need to have in any or combination of the
following forms:i) Cashii) Gold valued at a price not exceeding the current market price,iii)
Unencumbered approved securities (G Secs or Gilts come under this)
valued at a price as specified by the RBI from time to time

Standby Letter of Credit - A guarantee issued by a bank, on behalf of a buyer that protects the seller against non-payment for goods shipped to the buyer

Securitization - Securitization is a process of transformation of a bank loan into tradable securitiesSelective Credit Control (SCC) - Control of credit flow to borrowers dealing in some essential commodities to discourage hoarding and black-marketing

Tier 2 Capital - Comprises
Property Revaluation Reserves, Undisclosed Reserves, Hybrid Capital,
Subordinated Term Debt and General Provisions. This is Supplementary
Capital.Withdrawal: To take money out of your bank account. To make a withdrawal is the opposite of making a deposit